The issuer of a star cryptocurrency is being sued for $1.4trn

LAUNCHED AS REALCOIN in July 2014, Tether aimed to become a more reliable alternative to Bitcoin, the best-known cryptocurrency. With a $4.1bn market capitalisation, it is now the fifth-largest virtual currency. But its efforts to gain investors’ trust have fallen short. On October 6th a group filed a class-action lawsuit in New York, accusing Tether of being “part-fraud, part-pump-and-dump, and part-money laundering”. They call for truly startling damages: more than $1.4trn.

In response to The Economist’s queries, Tether’s general counsel said that “the lawsuit is meritless and the plaintiffs’ complaint is rife with errors.” The firm “has not used Tethers to manipulate any market”, he added, and operates in “full conformity with applicable laws”.

In 2014 Tether adopted its current moniker, which made its selling point explicit. With dollar reserves that it said matched Tethers one-to-one, it was one of the first “stablecoins”—digital...

via The Economist: Finance and economics Business Feeds

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